AFRICA AGRICULTURE STATUS REPORT 2016

KEY MESSAGES
ONE
Access to finance is critical for agricultural transformation, wealth creation
and long-term prosperity in Africa. Inadequate financing of agriculture has
been a major impediment to the sector, especially for smallholder farmers,
their organizations, and small and medium agro-enterprises which lack basic
financial services.
TWO
The unmet demand for finance in agriculture, which cuts across all the
agricultural value chains in Africa, is pushing for a search for new ways of
financing the sector. Innovative financing approaches and instruments are
being designed to mobilize additional resources and to address market failures
or institutional barriers.
THREE
Private-sector led approaches to mobilizing resources are becoming
increasingly important and show great promise for improving access to capital
in African agriculture. After years of neglect, banks, private equity funds,
impact investors, and microfinance institutions and financial cooperatives are
bringing new capital to African agriculture.
FOUR
Given the importance of finance for agricultural transformation in Africa, African
governments should continue to engage directly with the key stakeholders that
will be involved in scaling agricultural finance. Strengthening and leveraging
forward-looking partnerships involving the different actors is critical. Moreover,
governments’ role in creating an enabling environment is critical to avoid
stifling innovation.
148 AFRICA AGRICULTURE STATUS REPORT 2016